Profusa, Inc. 10-K

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS References to “Profusa,” the “Company,” “we,” “us,” and “our,” refer to Profusa, Inc. and its subsidiaries. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the consolidated financial statements and the notes thereto contained elsewhere in this Annual Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties. On July 11, 2025 (the “Closing Date”), NorthView Acquisition Corporation (“Northview”), consummated its previously announced business combination (the “Business Combination”) with Profusa, Inc., a California corporation (“Legacy Profusa”). Legacy Profusa, became our accounting predecessor upon the closing of the Business Combination on the Closing Date. The results of operations discussed below reflect those of Legacy Profusa and its consolidated subsidiary for periods prior to July 11, 2025, and those of the combined company for periods from July 11, 2025 onward. The year ended December 31, 2025 results include Legacy Profusa up to July 11, 2025, and the combined company thereafter. Cautionary Note Regarding Forward-Looking Statements This Annual Report includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other Securities and Exchange Commission (“SEC”) filings. 87 Business Overview We are a clinical-stage digital health and medical technology company focused on developing biosensing solutions to improve health outcome for patients in a variety of different diseases and conditions. Our first product is Lumee Oxygen, which enables physicians to ascertain the extent of perfusion, or passage of blood through the circulatory system to an organ or tissue, in patients with Critical Limb Ischemia (“CLI”) both during and after endovascular revascularization procedures. Lumee Oxygen has already received regulatory approval in Europe through the attainment of a CE mark; however, prior to commercialization in the U.S., Lumee Oxygen must obtain FDA clearance or approval. The latest version of Lumee Oxygen is called Wireless Lumee Oxygen System. It has multiple components, one of which is a microsensor that is injected into the tissue of the patient using a hypodermic needle. The sensor is designed so it does not need to be removed as it overcomes the foreign body response that usually inhibits the ability of permanent implants to function. The sensor contains no electronics, utilizing luminescence to send a light signal to a reader that is placed over the incision site, which in turn can send a signal to an app on a smartphone. We are in clinical trials for Lumee Glucose, our sensing solution being developed for use in continuous glucose monitoring (CGM). This system targets diabetics and pre-diabetics to allow them realtime access to their glucose data, at a price point that our management thinks is comparable or lower to existing systems. In 2024, we sold our oxygen sensor for research use only applications, namely animal models and in vitro testing. Management is targeting the European market (those jurisdictions that accept CE mark) for early launch for both Lumee Oxygen and Lumee Glucose. Lumee Oxygen’s launch in Europe occurred in 2023 and Lumee Glucose launch is expected to occur in 2026, subject to regulatory approval. We have access to key opinion leaders (“KOLs”) in both Europe and the United States, who deal with peripheral arterial disease (“PAD”) and Critical Limb Ischemia (“CLI”). We will sell directly to facilities based on the endorsement of these KOLs. In Germany, Austria and France, some KOLs have already used Lumee Oxygen on a trial basis. We have worked with reimbursement consultants to develop potential Category I Current Procedural Terminology (“CPT”) codes for Lumee Oxygen use. Additionally, we have entered into commercial and clinical collaboration agreements with practitioners and hospital departments in Austria, Belgium and France. Regarding Lumee Glucose, if and when we obtained marketing authorization, we plan to embark on a dual strategy of both direct to hospital sales, for our professional-use and personal-use CGM product, and direct to pharmacy sales for our personal use product only, thereby maximizing flexibility for the consumer. By aiming for coverage under a user’s pharmacy benefit, we believe we can diversify our user base, while accounting for any risk related to unlikely delay of attainment of a category I CPT code for sensor insertion. We feel a difference between other insertable or implantable CGMs and Lumee Glucose, is that the latter can be simply inserted with a hypodermic needle and does not require a surgical implantation, similar to how pharmacists use these needles to administer flu shots and other vaccines. At the same time, physicians can still leverage existing CPT codes related to interpretation of CGM data and we have, in parallel, initiated steps for CPT codes related to our sensor insertion. We will target both public and private payors for coverage. Since our launch, we have devoted significantly all of our resources to research and development, as well as all clinical study activities related but not limited to Lumee Oxygen, Lumee Glucose and prototypes for sensors of at least eight other analytes. We have also invested, on a smaller scale, in making sales of Lumee Oxygen for research- use only clients, which include entities working with animal models. Furthermore, we also performed research and development under government grants. Since inception, we have incurred recurring annual losses from operations. For the years ended December 31, 2025 and 2024, we incurred a net loss of $35.8 million and $9.2 million, respectively. During the years ended December 31, 2025 and 2024, we have used $16.2 million and $2.1 million, respectively, of cash in our operating activities. We have notes and loans payable and interest due of $6.6 million within twelve months of December 31, 2025. Additionally, we have loans payable and interest due of $7.9 million which are considered non-current and are due after December 31, 2026. We have been able to finance our operations primarily with the proceeds from the issuance of equity and debt instruments. For the year ended December 31, 2025, we obtained net cash from financing activities of $19.8 million, compared to $2.1 million for the same period in 2024. We held cash of $1.8 million and $0.2 million as of December 31, 2025 and 2024, respectively. 88 Our consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We have reviewed the relevant conditions and events surrounding its ability to continue as a going concern including among others: historical losses, projected future results, including the effects of COVID-19, cash requirements for the upcoming year, funding capacity, net working capital, total stockholders’ deficit and future access to capital. It is our expectation to continue to make substantial investments in building its European and United States commercial infrastructure and enhancing existing products and developing new ones. Furthermore, we aim to continue discussions with potential partners in Asia. We expect to incur additional expenses due to operating as a public company, including expenses related to compliance with the rules and regulations of the SEC and those of the Nasdaq Stock Market LLC, additional insurance expenses, investor relations activities and other administrative, professional and consulting services. As a result of these and other factors, we expect that we will require additional financing to fund our operations and planned growth. We may seek to raise any additional capital through equity offerings or debt financings, additional credit or loan facilities or a combination of one or more of these funding sources. In the scenario that we are unable to acquire sufficient financing or financing on terms satisfactory to our management or Board of Directors, our ability to continue to pursue our business objectives and to respond to business opportunities, challenges or unforeseen circumstances could be significantly limited, and our business, financial condition and results of operations could be materially adversely affected. For the current period and for twelve months following the issuance of these financial statements, our risk of going concern has been mitigated but not fully alleviated by Tranches 1 and 2 of the Ascent PIPE Notes issued for gross proceeds of $11.0 million. As of and for the year ended December 31, 2025, there continue to be factors which raise substantial doubt about our ability to continue as a going concern. Accounting for Business Combination On July 11, 2025, the Business Combination was successfully completed and was accounted for as a reverse capitalization in accordance with U.S. GAAP. Legacy Profusa was deemed the accounting predecessor of the combined business, and the Company as the parent company of the combined business, is the successor SEC registrant, meaning that our financial statements for previous periods will be disclosed in the registrant’s future periodic reports filed with the SEC. The Business Combination had a significant impact on our capital structure and operating results, and de-risked our product development, manufacturing and commercialization. The most significant changes in New Profusa’s future reported financial positions were approximately $11.0 million in proceeds from the PIPE Investment. This $11.0 million is offset by various deferred offering costs and $2.0 million closing fees related to the underwriters marketing fee for the IPO, which became payable upon the consummation of the Business Combination. As a result of the Business Combination, the Company has become the successor to an SEC-registered and Nasdaq-listed company, we have hired additional personnel and implement procedures and processes to address public company regulatory requirements and customary practices. We expect to incur additional annual expenses as a public company for, among other things, directors’ and officers’ liability insurance, director fees, and additional internal and external accounting, legal and administrative resources. Recent Developments Inflation, Monetary Response, and Economic Impacts The world economy is experiencing stubbornly high inflation, a challenge not faced for decades. Following the global financial crisis, with inflationary pressures muted, interest rates were extremely low for years and investors became accustomed to low volatility. The resulting easing of financial conditions supported economic growth, but it also contributed to a buildup of financial vulnerabilities. With inflation at multi-decade highs, monetary authorities in advanced economies are accelerating the pace of policy normalization. Policymakers have continued to tighten policy against a backdrop of rising inflation and currency pressures, albeit with notable differences across regions. Global financial conditions have tightened notably this year, leading to capital outflows. Amid heightened economic and geopolitical uncertainties, investors have aggressively pulled back from risk-taking and adjusted their investment preferences generally. Key gauges of systemic risk, such as higher dollar funding costs and counterparty credit spreads, have risen. There is a risk of a disorderly tightening of financial conditions that may be amplified by vulnerabilities built over the years. In addition, our business, growth, financial condition or results of operations could be materially adversely affected by instability or changes in a country’s or region’s economic conditions; inflation; changes in laws or regulations or in the interpretation of existing laws or regulations, whether caused by a change in government or otherwise; increased difficulty of conducting business in a country or region due to actual or potential political or military conflict; or action by the U.S. or foreign governments that may restrict our ability to transact business in a foreign country or with certain foreign individuals or entities. A possible slowdown in global trade caused by increasing tariffs or other restrictions could decrease consumer or corporate confidence and reduce consumer, government and corporate spending in countries inside or outside the U.S., which could adversely affect our operations. Climate-related events, including extreme weather events and natural disasters and their effect on critical infrastructure in the U.S. or internationally, could have similar adverse effects on our operations, users, or third-party suppliers. 89 Nasdaq Continued Listing and Reverse Stock Split As previously disclosed, on September 11, 2025, we received written notice from the Staff stating that we were not in compliance with the Minimum Bid Price Requirement and the MVLS Requirement. The Staff provided us an initial compliance period of 180 calendar days, or until March 10, 2026, to regain compliance with each of the Minimum Bid Price Requirement and the MVLS Requirement. On February 9, 2026, we effected a 1-for-75 reverse stock split of our common stock (the “Reverse Stock Split”). The Reverse Stock Split did not change the par value of the common stock or the authorized number of shares of common stock. All share and per share information has been retroactively adjusted to reflect the Reverse Stock Split for all periods presented. Also as previously disclosed, on October 27, 2025, we received a letter from the Staff notifying us that, for the previous 30 consecutive business days, the market value of our publicly held shares was below the Market Value Requirement. The Staff provided us with an initial period of 180 calendar days, or until April 27, 2026, to regain compliance with the Market Value Requirement. On March 11, 2026, we received a staff determination letter from the Staff indicating that we have not regained compliance with the Minimum Bid Price Requirement. The Staff previously provided a 180-day compliance period that expired on March 10, 2026; we did not regain compliance by that date. As a result, our securities are subject to delisting from The Nasdaq Global Market. In addition, the Staff indicated in its March 11, 2026 letter that we also did not regain compliance with the MVLS Requirement by March 10, 2026. The Staff stated that this MVLS deficiency is an additional basis for delisting. We exercised our right to appeal the delisting decision, and were notified on March 19, 2026 that the delisting action has been stayed. Our hearing with the Nasdaq Hearings Panel is scheduled for April 21, 2026. Amendment No. 1 to ELOC Purchase Agreement On July 28, 2025, we entered into an Equity Line of Credit (“ELOC”) Purchase Agreement and a related registration rights agreement with an investor, Ascent. Pursuant to the terms and conditions set forth in the ELOC Purchase Agreement, we may, from time to time and at its discretion, issue and sell to Ascent shares of its Common Stock for an aggregate purchase price of up to $100.0 million, subject to certain limitations and conditions. On December 22, 2025, we entered into Amendment No. 1 (the “SPA Amendment”) to the ELOC Purchase Agreement. Pursuant to the SPA Amendment, Section 1.1 of the ELOC Purchase Agreement was amended and restated to modify the definition of Floor Price to provide for a Floor Price at or above $0.111 per share during the period commencing on the date of the SPA Amendment and ending on, but excluding February 9, 2026, the effective date of the Company’s 1-for-75 reverse stock split (the “Modification Period”). The “Floor Price” as amended and restated means, during the Modification Period, solely with respect to an aggregate number of shares of Common Stock issued and sold as Purchased Securities not to exceed 182,000 shares, to be sold at or above $0.111 per share and below $0.14. Upon the earliest to occur of (x) the issuance of such aggregate number of 182,000 shares as Purchased Securities during the Modification Period or (y) the end of the Modification Period, the Floor Price shall thereafter mean $0.14, the price per share of Common Stock equal to the product obtained by multiplying (x) twenty percent (20%) by (y) the Official Closing Price on July 25, 2025, in each case as further adjusted to reflect any reduction (but excluding any increase) in the price per share of Common Stock caused by any reorganization, recapitalization, non-cash dividend, share split or other similar transaction, all as provided in this Agreement. The modified Floor Price of $0.111 per share applies only during the Modification Period and only up to the 182,000 share cap relating to shares issued and sold below $0.14, and the unmodified definition applies to all other times and shares. Since execution of the ELOC Purchase Agreement through December 31, 2025, we have drawn $10.3 million under the ELOC Purchase Agreement, and have made loan and interest repayments with these proceeds of $1.9 million through December 31, 2025. Subsequent to December 31, 2025 and through the date of filing, we issued 321,439 shares of our common stock in exchange for $0.8 million under the ELOC Purchase Agreement and issued 2,696,907 shares of our common stock for the settlement of $1.9 million of principal and interest on the Ascent PIPE Notes. 90 Mayo Clinic License Agreement On February 11, 2026, we entered into a know-how License Agreement (the “License Agreement”) with Mayo Foundation for Medical Education and Research (“Mayo”), pursuant to which Mayo granted us an exclusive license to certain patent rights, which the parties plan to file for and obtain during the term of the License Agreement, and a non-exclusive license to specified know-how in the fields of continuous oxygen measurement and critical limb-threatening ischemia, with the right to sublicense such rights. Mayo retains customary reserved rights for educational, research and clinical programs of Mayo. As consideration, beginning with the first commercial sale of a licensed product, we are required to pay royalties on net sales of licensed products in amounts that vary depending on the applicable field and intellectual property coverage. We are also obligated to make milestone payments upon the achievement of specified commercial, regulatory and clinical events. In connection with the License Agreement, we will collaborate with Mayo to investigate high impact clinical applications of our technologies for new product development and commercialization. The License Agreement contains customary provisions regarding confidentiality, representations, warranties, disclaimers and indemnifications, and termination rights. The term of the License Agreement extends for a period tied to the life of the licensed patent rights and a post-commercialization period, unless earlier terminated. PPP Loan Forgiveness We applied for loan forgiveness for the remaining PPP loan in December 2025. On February 11, 2026, the Company received approval for forgiveness from the SBA for the full $1.3 million principal loan balance. This amount will be recognized as a gain on PPP loan forgiveness in Other Income for the year ended December 31, 2026. Sale of Bitcoins On February 10, 2026, we sold 3 Bitcoins at a price of $69,222 per Bitcoin for an aggregate amount of $0.2 million. On February 17, 2026, we sold 5.5 Bitcoins at a price of $67,156 per Bitcoin for an aggregate amount of $0.4 million. On March 11, 2026, we made the determination to terminate our Bitcoin treasury reserve strategy in light of current market conditions and the evaluation of our capital allocation priorities. On March 13, 2026, we sold the remaining balance of 8.01 Bitcoins, at a price of $71,457 per Bitcoin for an aggregate amount of $0.6 million. Amendments on Related-party Convertible Promissory Note On March 20, 2026, we entered into an amendment for our related-party promissory note to extend the maturity date from January 11, 2026 to December 31, 2026. On April 6, 2026, we amended the note to update the conversion price to $0.76 per share and concurrently approved the conversion of the entire outstanding principal balance of $1.9 million into 2,460,257 shares of its common stock to the holders. Amendment No. 4 on the PIPE Subscription Agreement On April 2, 2026, we entered into Amendment No. 4 to our PIPE Subscription Agreement and related Pledge Agreement with Ascent. Under Amendment No. 4, we may request additional funding with an aggregate principal amount of up to $12.2 million, subject to the terms and conditions of the amended agreements. Amendment No. 4 also modified certain terms of the related Pledge Agreement, including revising the release condition to provide that the applicable release condition will be satisfied upon payment in full, whether in cash or through conversion, of an aggregate principal amount of $1.7 million of notes issued in the additional closings expected to occur on or shortly after April 2, 2026. In addition, we have agreed with Ascent that any mandatory prepayment amounts received under the notes will first be applied to obligations related to such additional notes and thereafter to certain previously issued secured convertible promissory notes. In connection with the additional closing on April 2, 2026, we issued an Ascent PIPE Note with an aggregate principal amount of $0.6 million and a warrant to purchase 1,111,111 shares of our common stock at an initial exercise price of $0.50 per share. The note matures on April 2, 2027, bears interest at 12% per annum and is convertible into shares of our common stock, subject to the terms of the note. The warrant contains customary terms and provisions for instruments of this nature. 91 Letter of Intent Relating to Proposed Acquisition On March 31, 2026 (and amended and restated on April 3, 2026), we entered into a non-binding letter of intent with Bio Insights LLC (“Bio Insights”) to acquire certain assets, including the PanOmics assay and related know-how, for aggregate consideration of $30.0 million, payable entirely through the issuance of our equity securities, including common stock and convertible preferred stock. In connection with the proposed transaction, Bio Insights would be entitled to receive royalty payments equal to 3% of net revenues, payable annually following completion of audited financial statements. The proposed transaction remains subject to the execution of definitive agreements, stockholder approval, and other customary closing conditions. Principles of Accounting and Consolidation The accompanying consolidated financial statements have been prepared in conformity with U.S. GAAP and pursuant to applicable rules and regulations of the SEC and include all adjustments necessary for the fair presentation of our financial position as of December 31, 2025 and 2024 and the results of operations and cash flows for the years then ended. The accompanying consolidated financial statements include the accounts of Profusa Inc. and its wholly owned subsidiary, Profusa Asia Pacific Pte. Ltd (“APAC”). All intercompany balances and transactions have been eliminated in consolidation. Components of Results of Operations Government Grant Revenue Government grant revenue consists of amounts we earn under grants from two government agencies: NIH and DARPA. These grants are provided either in the form of expense reimbursement (expense reimbursement grants) or on a fixed fee basis (fixed fee grants). Under the expense reimbursement grants the government agencies reimburse us for a portion of our expenses (allowable expenses) that have been incurred in a given period on the basis of reports that we provide to these agencies. Fixed fee grants are awarded for specific research and development programs undertaken by us. Under these grants we receive milestone payments from the government agencies upon our submission and approval by the government of agreed upon deliverables, consisting primarily of the documented results of the specific research and development programs. Research and Development Expenses Research and development expenses consist primarily of personnel expenses, including salaries, benefits, and stock-based compensation, costs of consulting, supplies, depreciation and amortization and allocations of facility-related expenses. We expect our research and development expenses to increase as we increase staffing to support product development, continue our clinical trials, build prototypes, and continue to explore and develop next generation technologies. General and Administrative Expenses General and administrative expenses consist of personnel expenses, including salaries, benefits, and stock-based compensation, related to executive management, finance, legal, human resource functions, and business development, contractor and professional services fees, audit and compliance expenses, insurance costs and general corporate expenses, including merger transaction costs incurred, allocated facility-related expenses and information technology costs. Loss on Change in the Fair Value of Convertible Notes We elected to apply the fair value option to account for (i) the convertible notes issued between June 2023 and March 2024 (the “Tasly Convertible Note”), (ii) the Ascent PIPE Notes issued during the year ended December 31, 2025 and (iii) the Northview Sponsor working capital promissory note. Loss on change in the fair value of convertible notes comprise of the change in fair value of the Company’s convertible notes and its related accrued interest on the convertible notes. These abovementioned notes were recorded at fair value at inception and are subject to remeasurement to fair value at each balance sheet date, with the change in fair value reflected in our consolidated statements of operations. Gain on Change in the Fair Value of Warrant Liabilities The change in fair value of our private warrant liabilities that we acquired as a result of our Business Combination is reflected in this financial statement line item. 92 Loss on Change in the Fair Value of Digital Assets The change in fair value of Bitcoins that we hold during the respective periods is reflected in this financial statement line item. Financing Costs Financing costs consists of costs in relation to the issuance of shares under the ELOC Purchase Agreement. Interest Expense Interest expense consists primarily of the interest on our convertible notes, related party convertible notes, senior notes, promissory notes, and PPP Loans. Other Income Other income consists primarily of interest income earned from our operating cash account, income earned from sale of equipment and a short-term sublease of a portion of our facilities. Results of Operations Comparison of the years ended December 31, 2025 and 2024 The following table sets forth our consolidated statements of operations for the periods indicated (in thousands): Year Ended December 31, Change 2025 2024 $ % Revenue $ — $ 100 $ (100 ) (100 )% Operating expenses: Research and development 2,804 1,608 1,196 74 % General and administrative 24,902 2,992 21,910 732 % Total operating expenses 27,706 4,600 23,106 502 % Loss from operations (27,706 ) (4,500 ) (23,206 ) 516 % Other income (expenses) Loss on change in the fair value of convertible notes (3,378 ) (311 ) (3,067 ) 986 % Gain on the change in fair value of warrant liabilities 895 — 895 100 % Loss on the change in fair value of digital assets (555 ) — (555 ) 100 % Interest expense (including related parties amounts of $1,330 and $2,400 for the years ended December 31, 2025 and 2024, respectively) (2,521 ) (4,424 ) 1,903 (43 )% Financing costs (2,574 ) — (2,574 ) 100 % Other income 16 5 11 220 % Total other expense, net (8,117 ) (4,730 ) (3,387 ) 72 % Net loss $ (35,823 ) $ (9,230 ) $ (26,593 ) 288 % Revenue – Grant revenue was recognized in 2024, while no grant revenue was recognized in 2025, as we focused on closing the Business Combination. Research and Development – Research and development expenses increased by $1.2 million, or 74%, to $2.8 million during the year ended December 31, 2025 from $1.6 million during the year ended December 31, 2024. The increase was driven primarily by the increase in regulatory and contract research organization (“CRO”) costs of $0.8 million, plus laboratory rent and materials costs of $0.2 million and $0.1 million, respectively, which is in line with our intent to focus on research and development to complete device functionality and reach the point of commercialization in the near future. 93 General and Administrative – General and administrative expenses increased by $21.9 million, or 732%, to $24.9 million during the year ended December 31, 2025 from $3.0 million during the year ended December 31, 2024. The increase was driven primarily by the increase in transaction closing costs of $14.5 million, an increase in personnel costs of $4.3 million, increase in accounting fees of $1.1 million, an increase in public relations expense of $0.7 million and an increase to insurance and legal fees of $0.6 million. Loss on Change in the Fair Value of Convertible Notes – Loss on change in the fair value of convertible notes increased by $3.1 million, or 986%, to $3.4 million during the year ended December 31, 2025 from a loss of $0.3 million during the year ended December 31, 2024. The loss recognized during the year ended December 31, 2025 was driven by the losses on the remeasurement of the Ascent PIPE Notes and the Tasly Convertible Note of approximately $3.3 million and $0.1 million, respectively, partially offset by the gain on the remeasurement of the Northview Sponsor working capital promissory note of $0.2 million. During the year ended December 31, 2024, the entirety of the loss on change in the fair value of convertible notes was due to the remeasurement of the Tasly Convertible Note. Gain on Change in the Fair Value of Warrant Liabilities – Gain on change in the fair value of warrant liabilities was $0.9 million during the year ended December 31, 2025 due to the decline in our stock price during the same period. We acquired the warrant liabilities as a result of the Business Combination and therefore the change in fair value of warrant liabilities is only reflected in the year ended December 31, 2025. Loss on Change in the Fair Value of Digital Assets – Loss on change in the fair value of digital assets was $0.6 million during the year ended December 31, 2025. We did not have any Bitcoin in the year ended December 31, 2024. Interest Expense – Interest expense decreased by $1.9 million, or 43%, to $2.5 million during the year ended December 31, 2025 from $4.4 million during the year ended December 31, 2024. The decrease was primarily due to junior and senior convertible notes being converted and settled on July 11, 2025, the Closing Date of our Business Combination, which reduced the accrued interest on these notes for the remainder of the year ended December 31, 2025. Financing Costs – Increased by $2.6 million in relation to the issuance of shares under the ELOC Purchase Agreement. Other Income – Other income increased by an immaterial $11 thousand during the year ended December 31, 2025 relating to interest income earned on our cash operating account. Liquidity and Capital Resources Sources of Liquidity We incurred net losses and negative operating cash flows from operations since inception, and we expect to continue to incur losses and negative operating cash flows for the foreseeable future until we successfully commence sustainable commercial operations. To date, we have funded our operations primarily with proceeds from the issuance of convertible preferred stock, junior and senior convertible notes, related party loans payable, ELOC, PPP Loans available to us under the Paycheck Protection Program, convertible PIPE note, related party convertible notes, and other promissory notes. From inception through December 31, 2025, we raised gross proceeds of $98.0 million from the issuances of convertible preferred stock and convertible notes and loans, $11.0 million from loans payable, $10.3 million from ELOC, $2.5 million from PPP Loans and $1.0 million from issuance of promissory notes. As of December 31, 2025, we had cash of $1.8 million. 94 Our junior convertible notes bore interest at 12% per annum and their outstanding principal and accrued but unpaid interest automatically converted into shares of Common Stock at $525.00 per share upon consummation of the Business Combination, as adjusted by our Reverse Stock Split. In addition, upon consummation of the Business Combination, all junior noteholders have a right to receive additional shares upon achievement by the Company of certain share price and sales milestones (the earnout shares). We commenced issuance of our senior convertible notes in April 2021 and continued issuing them until the Closing. Our senior convertible notes bore interest at 12% per annum and their outstanding principal and accrued but unpaid interest automatically converted into shares of Common Stock between $37.50 and $300.00 per share upon consummation of the Business Combination, based on the fixed conversion price defined in the notes, as adjusted by our Reverse Stock Split. In addition, upon consummation of the Business Combination, all senior noteholders obtained the right to receive additional shares upon achievement by the Company of certain share price and sales milestones (the earnout shares). On August 8, 2023, a new wholly owned subsidiary, APAC, was created and incorporated by Legacy Profusa under the laws of Singapore. Upon creation, the new entity was capitalized by Legacy Profusa by payment of $1,000 for 1,000 Ordinary Shares. As a result, at the time of incorporation, the entity became a wholly owned subsidiary of Legacy Profusa. The entity was created with the expectation of jointly conducting the business of developing, manufacturing and commercializing the Lumee Glucose and the Lumee Oxygen products, currently under development by the Company, together with a third party. No business or activities will have been conducted by the entity from the date of formation through and until the closing date of the proposed License Agreement and Shareholders Agreement between the Company and Best Life Technology Ltd, an entity wholly owned and controlled by Tasly. In the event we either fail to complete the formation of the APAC Joint Venture or fail to repay the amounts under the Tasly Convertible Note when they become due, the lender will have an option to convert the outstanding balance and accrued but unpaid interest (in part or in full) into senior unsecured promissory notes on substantially the same terms as the outstanding Senior Notes as converted on July 11, 2025 into New Profusa (which terms include conversion into Company Common Stock). Notwithstanding the conversion provisions above, any repayment obligations (in part or in full) of the outstanding principal balance and accrued but unpaid interest under the Tasly Convertible Note may, at the lender’s option, be made through conversion of part or all amounts payable into (i) senior unsecured promissory notes on substantially the same terms as the outstanding Senior Notes as converted on July 11, 2025, $37.50 per share, or (ii) Common Stock at a conversion price of $144.00 per share. Our outstanding PPP Loan of $1.4 million bears interest at 1% per annum. As of December 31, 2025, the repayment of the PPP Loan was expected to be made in equal monthly payments of principal and interest from October 25, 2022 until May 25, 2026. In February 2026, our application for forgiveness for this loan was approved. Our outstanding promissory notes accrue interest at 5% and 12% per annum, most of which do not have a set maturity date. Any promissory notes that did have an initial maturity date, which has passed, we have verbally agreed to pay off these loans subsequent to the Closing. We are currently in default; accordingly, we classified the entire outstanding amount as a current liability on the consolidated balance sheets. 95 Additional funds may be necessary to maintain current operations and will be required for successful product commercialization efforts. Subsequent to the year ended December 31, 2025, we obtained additional funds from the ELOC, however, conditions exist that raise substantial doubt about our ability to continue as a going concern within one year from the date the consolidated financial statements as of and for the year ended December 31, 2025 are issued. Long-Term Liquidity Requirements We expect our cash on hand, and cash that we received from the Business Combination and PIPE Investment, together with proceeds from the ELOC and the cash we expect to generate from future operations and sale of digital assets, will provide sufficient funding to support initial commercial operations. The cash generated from the Business Combination includes an initial net $9.0 million in PIPE proceeds from the first tranche and net $2.0 million from the second tranche of a convertible note. The cash generated from the ELOC was $10.3 million for the year ended December 31, 2025. Until we generate sufficient operating cash flow to cover our operating expenses, working capital needs and planned capital expenditures, or if circumstances evolve differently than anticipated, we expect to utilize a combination of equity and debt financing to fund any future capital needs. If we raise funds by issuing equity securities, dilution to stockholders may result. Any equity securities issued may also provide for rights, preferences, or privileges senior to those of holders of common stock. If we raise funds by issuing debt securities, these debt securities may have rights, preferences, and privileges senior to those of common stockholders. The terms of debt securities or borrowings could impose significant restrictions on our operations. The capital markets are currently experiencing, and may continue to experience in the future, periods of upheaval that could impact the availability and cost of equity and debt financing. Our principal uses of cash in recent periods have been funding our research and development activities, legal and bank transaction fees, and other personnel cost. Near-term capital requirements through December 31, 2026 leading to and supporting initial commercialization are estimated to total approximately $14.5 million and include further research and development to enable us to obtain the required regulatory approvals, manufacturing, commercialization and wide-scale marketing for our Lumee Oxygen and Lumee Glucose devices. Our future capital requirements will depend on many factors, including our revenue growth rate, the timing and the amount of cash received from our customers, the expansion of sales and marketing activities, the timing and extent of spending to support development efforts. In the future, we may enter into arrangements to acquire or invest in complementary businesses, products, and technologies. For any periods after the twelve months subsequent to the filing of these financial statements as of December 31, 2025, we may be required to seek additional equity or debt financing. In the event that we require additional financing we may not be able to raise such financing on acceptable terms or at all. If we are unable to raise additional capital or generate cash flows necessary to continue our research and development and invest in continued innovation, we may not be able to compete successfully, which would harm our business, results of operations, and financial condition. If adequate funds are not available, we may need to reconsider our production investments, the pace of our production ramp-up, expansion plans or limit our research and development activities, which could have a material adverse impact on our business prospects and results of operations. 96 Cash Flow Summary The following table summarizes our cash flows for the periods presented (in thousands): Year Ended December 31, 2025 2024 Change Net cash provided by (used in): Operating activities $ (16,248 ) $ (2,066 ) $ (14,182 ) Investing activities (2,008 ) — (2,008 ) Financing activities 19,843 2,115 17,728 Net increase in cash $ 1,587 $ 49 $ 1,538 Operating Activities Cash used in operating activities for the year ended December 31, 2025 of $16.2 million was primarily driven by our net loss of $35.8 million, adjusted for non-cash charges of $15.2 million and net cash inflows of $4.3 million provided by changes in our operating assets and liabilities. Non-cash charges primarily consisted of non-cash issuance of inducement shares in connection with the merger of $7.3 million, the non-cash loss on fair value of convertible notes of $3.1 million, non-cash interest expense of $2.5 million, non-cash issuance cost of $1.0 million for ELOC Warrants, stock-based compensation of $0.9 million, the loss on the change in fair value of digital assets of $0.6 million, non-cash merger transaction costs of $0.5 million, offset by the gain on fair value of warrant liabilities of $0.9 million. The main driver of the cash inflows from the changes in operating assets and liabilities was primarily related to an increase in accounts payable of $3.6 million and in accrued liabilities of $0.5 million and a decrease in prepaid expenses and other current assets of $0.2 million. Investing Activities Cash used in investing activities was $2.0 million for the year ended December 31, 2025, which consisted primarily of the purchase of digital assets. As of December 31, 2025, the Company held 16.51 units of Bitcoin. Bitcoin is subject to significant price volatility. A substantial decline in the market price of Bitcoin could materially reduce the value of our holdings and adversely affect our financial position. We did not have any investing activities in the year ended December 31, 2024. Financing Activities Cash provided by financing activities was $19.8 million for the year ended December 31, 2025, which consisted primarily of net proceeds from the issuance of ELOC of $10.3 million, issuance of PIPE of $11.0 million, issuance of senior notes of $1.5 million, offset by the repayment of convertible notes and senior notes of $2.9 million. Cash provided by financing activities was $2.1 million for the year ended December 31, 2024, which consisted primarily of net proceeds from the issuance of senior notes of $3.2 million, primarily offset by payment of deferred offering costs of $1.0 million and the repayment of related party promissory notes of $0.2 million. 97 Contractual Obligations The following table summarizes our contractual obligations as of December 31, 2025, and the years in which these obligations are due (in thousands): 2026 2027 Total Tasly convertible note - related party $ 2,290 $ — $ 2,290 Convertible promissory note - related party 1,870 — 1,870 Loans payable — 7,877 7,877 Senior notes 42 — 42 Promissory notes 1,049 — 1,049 PPP loan 1,390 — 1,390 Total contractual obligations $ 6,641 $ 7,877 $ 14,518 Critical Accounting Estimates Management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions for the reported amounts of assets, liabilities, revenue, expenses and related disclosures. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions and any such differences may be material. We consider an accounting estimate to be critical if: (1) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (2) changes in the estimate that are reasonably likely to occur from period to period, or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. Management has discussed several significant accounting estimates and believes that the fair value of the Ascent PIPE Notes, is the only accounting estimate that rises to the level of a critical accounting estimate. The Ascent PIPE Notes is carried at fair value based on unobservable market inputs. The fair value of financial instrument is determined using the Monte Carlo simulation model. Where observable market prices are not available, we use models that incorporate assumptions about credit risk, interest rates, and market volatility. These estimates require significant judgment, particularly for instruments classified as Level 3 in the fair value hierarchy. Changes in these assumptions could materially affect the reported fair values and related income or expense. We regularly review and update our valuation to reflect current market conditions and ensure consistency with accounting standards. 98 Management considered various fair value instruments; however, only the Ascent PIPE Notes is both classified as a Level 3 fair value instrument and is material to our consolidated financial statements. The Ascent PIPE Notes was valued at $7.9 million as of December 31, 2025. In addition, we consider this estimate critical due to its complexity, subjectivity, and material impact on reported results. As such, we have one critical accounting estimate to report, and have included our considerations below. Ascent PIPE Notes We have elected to account for our Ascent PIPE Notes at fair value under ASC 825, “Financial Instruments.” The PIPE Subscription Agreement is classified as a Level 3 financial instrument due to the absence of observable market inputs and the significant use of management judgment in determining fair value. The fair value is estimated using a probability-weighted discounted cash flow model that incorporates multiple simulated settlement scenarios, including conversion, repayment, and extension. Key inputs include the discount rate, expected term, volatility, and conversion likelihood. When the PIPE Subscription Agreement was executed between Northview and the PIPE investors, the loan was with a related party, as such observable market data is limited, and management applies significant judgment in assessing the economic substance of the arrangement. During the year ended December 31, 2025, the estimated fair value of the Ascent PIPE Notes increased by $3.3 million. Changes in fair value are recognized in earnings each period. We consider this estimate critical due to its complexity, subjectivity, and material impact on reported results. Valuation policies are reviewed quarterly, and inputs are updated based on evolving market conditions and contractual developments. A change in the discount rate of +100 basis points would result in a fair value change of approximately $13 thousand or (0.2)%, while a 10% change in volatility would impact fair value by approximately $8 thousand or 0.1%. The reconciliation of the beginning and ending balances for the Ascent PIPE Notes can be referenced in Note 4 of the accompanying consolidated financial statements included elsewhere in this Annual Report. Recent Accounting Pronouncements See the section titled “Recent Accounting Pronouncements” in Note 2 of the notes to our consolidated financial statements included in this Annual Report for more information. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not required for smaller reporting companies. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The financial statements required to be filed pursuant to this Item 8 are appended to this Annual Report. An index of those financial statements is found in Item 15. 99 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.